In pursuit of lower migration rates, the Government has increased visa fees and introduced new levies and charges for employers sponsoring workers on Tier 2 (General) Visas. Often, after agreeing to sponsor a foreign worker, employers are surprised by the hidden costs, particularly where the organisation has undertaken to pay all the Tier 2 visa costs associated with an application.

For many employers that sponsor foreign workers, the Tier 2 (General) Visa system has become inaccessible. The minimum salary now required to sponsor foreign workers or secure an Indefinite Leave to Remain (ILR) Visa means that for many industries, Tier 2 (General) Visas are no longer viable.

The substantial cost of sponsoring Tier 2 workers is designed to further dissuade organisations from utilising the system.

The rationale is simple. If it’s too expensive to sponsor foreign workers, fewer employers will do it.

It also has the added advantage of raising revenue for the Home Office.

Earlier this year the Home Office justified its most recent visa fee increases by declaring “these changes ensure that the Home Office can achieve a self-funding system, while continuing to provide a competitive level of service, and a fees structure that remains attractive to businesses, migrants and visitors.”

This article identifies the levies, charges and fees that an employer can expect to pay when sponsoring workers on a Tier 2 (General) Visas.

  1. Higher fees for visas and settlement applications

On 11 January 2016, the Government announced the latest fee hikes for visa and nationality applications. These new fees took effect from 18 March 2016.

For most visa applications, including for Tier 2 (General) Visas, the standard fees increased by 2%. Tier 2 (General) Visa applications rose from £564 to £575.

Applications for ILR, permanent residence and naturalisation rose by a hefty 25%.

A visa holder, seeking to apply for ILR, must now pay £1875, an increase of more than £600.

For those who wish to make an application for UK naturalisation, fees have increased from £1,005 to £1,236.

  1. Premium and other services

The Home Office offers premium and priority services.

The standard processing time for visas varies between countries but can typically take several months. Any visa applicant who has secured employment and needs to arrive in the UK within a set period, may be required to pay an additional fee for a priority service.

In the latest fee hike, the fees for these premium services increased by up to 33%.

For those making their visa applications from outside the UK, the priority service for Settlement Visas increased from £360 to £450. For Non-Settlement Visas, the fee increased from £120 to £150 and for those applicants seeking the ‘Super Priority’ visa service, the fee went up from £600 to £750.

For applications within the UK, an applicant seeking to make an in-person priority application must pay £500 (increased from £400) or £563 if the appointment is made outside office hours. The priority postal service fee was increased from £300 to £375.

If an applicant wished to speak with someone on the telephone about a specific application, calls are charged at a rate of £1.37 per minute. Webchat sessions are charged at a rate of £4 per 10 minutes.

  1. Sponsorship licence

In addition to the application fees, Tier 2 and Tier 5 sponsors are required to pay a sponsor licence fee.

The fees vary depending on the size of the organisation but have not been increased by recent fee amendments.

For a large Tier 2 sponsor, the annual fee is £1,475. For a small Tier 2 sponsor, the annual licence is £536.

  1. Certificate of Sponsorship

In addition to maintaining a licence and paying application fees, employers are also required to pay a fee for each Certificate of Sponsorship that is allocated to it.

For Tier 2 workers the fee is £199 per worker.

  1. Immigration Skills Charge

The Government has recently announced a further Immigration Skills Charge of £1,000 per migrant worker sponsored under the Tier 2 (General) Visa per year.

A reduced rate of £364 per annum applies to small businesses and charities.

The charges, announced in March 2016, are based on the recommendations of the Migration Advisory Committee and are designed to cut down on the number of employers taking on migrant workers and to incentivise training British staff to fill the those jobs.

“This important charge delivers valuable flexibilities that will help to address skills shortages while ensuring the UK remains a leading knowledge economy and popular destination for international students,” said former Universities and Science Minister, Jo Johnson.

There are limited exemptions for PhD level roles in science and research, UK graduates switching from a Tier 4 to a Tier 2 Visa and the Intra Company Transfer Graduate Trainee Visa category.

This new charge is set to take effect from April 2017.

  1. NHS Levy

In 2015 the Government introduced a further immigration health surcharge for all non-European Union Citizens.

Non-EU citizens are now required to pay an annual fee of £200 for each year of their visa. A discounted fee of £150 applies to those aged between 18 and 30.

The fee is paid upfront, when making a visa application. A five-year visa application, for example, now attracts a further fee of £1,000.

The surcharge is reported to have raised more than £100m for the NHS in the first six months.

Initially, New Zealand and Australia were exempt from the charge because of reciprocal agreements between Australia/NZ and the UK that allowed citizens of one county to use the health care services of the other for free. But as of 6 April 2016, Australian and New Zealand nationals are also required to pay the charge.